News: The RBI has revived its plan to introduce polymer (plastic) currency notes.

About

• Polymer notesà made from Biaxially Oriented Polypropylene (BOPP) instead of cotton-based paper.
• BRBNMPL has invited global bids for BOPP-based polymer substrates, with a pilot likely for ₹10 and ₹20 notes.
• They are more durable, water-resistant, tear-resistant and have advanced anti-counterfeiting features.
• Used in 60+ countries, with Australia being the first (1988).

Key Highlights

• Last 2.5–4 times longer than paper notes.
• Reduces replacement of soiled notes and lowers lifecycle costs.
• Offers enhanced security through transparent windows and embedded features.
• TERI study: Lower lifecycle carbon footprint despite higher initial production emissions.

Need

• India spends nearly ₹5,000 crore annually replacing damaged notes.
• Around 20–24 billion soiled notes are destroyed every year under the RBI's Clean Note Policy.
• Lower denomination notes (₹10 & ₹20) wear out quickly due to frequent circulation.

Challenges

• 30–60% higher manufacturing cost than paper notes.
• Dependence on imported polypropylene (BOPP).
• Requires recalibration of ATMs and currency-processing machines.
• Recycling and plastic waste management concerns.

Significance

• Improves currency durability and security.
• Reduces counterfeiting and replacement costs.
• Supports efficient currency management while complementing—not replacing—digital payments.